Last Night's Market Recap
Overnight – Equities higher on Apple optimism and softer economic data
Equities ground higher for a fourth-straight day as signs of a slowing U.S. economy bolstered bets on a Federal Reserve pause next month. The labor market, continued to show signs of slowing after data showed the economy produced fewer than expected jobs in August. ADP job numbers reported 177,000 new private-sector jobs were created in August, well below 371,000 increase in July, easing fears that a tight labor market would push wages and inflation higher. As well signs of a weakening labor market, the latest reading of second-quarter economic growth was revised lower to 2.1% from a prior reading of 2.4%.
Apple Inc led tech higher rising nearly 2% after Citigroup reiterated its buy rating on the stock amid optimism about the iPhone 15 launch slated for Sept. 12. Apple is expected to hike prices for the iPhone 15 by $100 to $200, Citi estimates, adding that the new iPhone is likely to spur a wave of updates among consumers with an iPhone 12.
Chips stocks also helped the broader tech sector advance, with bellwether Nvidia climbing 1%, but semiconductor maker Ambarella plunged 20% after its weaker Q3 guidance offset better-than-expected Q2 results. Global PC maker, HP fell nearly 7% after cutting its annual profit and free cash flow guidance and reporting second-quarter sales that fell short of estimates amid a slower than expected recovery in PC demand in China.
Focus will now be locked on Friday nights US employment data, expecting a gain of 169k jobs and the unemployment rate remaining stubbornly low at 3.5%
S&P 500 - Heatmap
Commodities
Bonds
The Day Ahead
SPI Futures 7263 (+0.05%)
With earnings season wrapped up, we will return to the market focusing on central banks and economic data as the catalyst for movement. Yesterdays quarterly CPI numbers in AU came in lower than expected giving the market a broad push higher as the speculation that the RBA is “all talk” about higher rates as we transition to a more dovish Governor in Michelle Bullock.
Yesterday’s positive move confirmed our technical view that we are likely to see a “grind higher” rally over the coming weeks unless stronger than expected US data sends global bond yields higher.
While many risks remain to the equity market and the economy, markets seem unbreakably optimistic. At MPC we remain cautious, however we see short-term opportunities in certain areas of the market.
“Where ignorance is bliss, ‘tis folly to be wise” – Thomas Gray
Calendar
Economic
